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Tuesday, January 1, 2013
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New Year Call for Radio Industry Reason

(Publisher's Note: The following appeared at Audio Graphics on December 17, 2008.)

This is a rant. It's my annual recognition of the radio industry's position, relative to everything that it could be. We'll start by asking this question: What happened in 2008?

Radio industry stocks dropped to less than a dollar because advertisers stopped shoveling money into local media. Meanwhile, local online advertising revenue is growing because advertisers like new media's ability to state the number of persons in its audience who were exposed to its advertising.

" industry executives continue to line their pockets with cash while calling these times bad enough that they have to cut people loose." In 2008, audiences began giving more attention to the internet because content is far more diverse and much better than what is being presented in old media. Oh, and broadband delivered the internet to 75.7 million Americans in an on/off fashion [like radio].

Sure the economy took a dive unlike anything we've seen since 1929. However, to use that as an excuse for such terrible drops in radio revenue is a maximum cop-out.

To say that radio suffers because the internet came along and stole its audience is also a fabricated excuse. Radio stopped producing content worthy of an audience's time or an advertiser's money, and then came the economic downturn.

Witnessing a few of this year's final movements in the radio industry causes everyone with a grasp of new media (or old) to just shake their heads. Radio executives still haven't learned how audio's environment has changed.

Can this really be happening? Are those in charge so filled with hubris that they believe their actions in 2008 did anything less than reconfigure a once highly-respected local media as a tongue-in-cheek punch line with most everyone under 30 years old?

Radio, it's shoulder-shaking time; when someone with experience and knowledge grabs you by the shoulders and shakes you, hard, while looking in your eyes and speaking the words "What are you doing?"

I'm not going to pretend to have the programming brains of our recently-passed Bill Drake. I will, though, show as evidence 11 years of written testimonials on what the radio industry has been doing while it was losing its thunder.

This web site was launched on January 15, 1997. Since then I've written millions of words on what radio is up against with the internet and computers. I've talked with hundreds (thousands?) of radio managers to describe exactly what the present day scenario is doing within and to radio. I met with Clear Channel CEO, John Hogan, who flew into Cleveland specifically to discuss the industry and the internet. I point-blank told him over twenty-four months ago that this landslide of internet activity was banging on an ill-prepared Clear Channel and radio industry. He, of course, denied it. (I also told him his web sites suck. He didn't listen to that either.)

Long before new media platforms began stealing radio's spotlight with ad buyers, you read at Audio Graphics about the use of analytics and metrics, how podcasting was not a simple repurposing of morning show skits, that advertisers find nothing worthwhile to buy in a seven-minute spot cluster, and how the content of radio programs and commercials needs to be updated.

Nothing appears to be taking hold with today's radio executives. As we approach 2009 there are more staff cuts. Another financial expert is being given control of another radio group while a radio insider with 12 years of programming experience is elevated to the position of VP of Digital Media in New York City.

Here are two points that the radio industry needs to understand as it moves into the new year: 1) You cannot successfully program on the internet with a radio mindset. 2) Bean counters have no concept of what it takes to create compelling programming. (I'll throw in a third thought: You don't create compelling programming simply by calling it "compelling.")

In 2009 radio will face an even larger drop in TSL and revenue due to:
Overworked PDs who could have pulled off great programming if they didn't
have to do it for five stations
An overly zealous RIAA, which will get its over-the-air performance royalty
fees passed
Internet radio, on units that plug into a car's audio system - if they don't
come factory-installed
Continued talent downsizing in numbers and on-air experience, resulting
in increased syndicated content
Bickering ratings companies, both offering nothing close to the accountability
of new media
New media advertising sellers who are growing in numbers on your local streets
New media advertising sellers who are a click away at Google AdWords
and Yahoo! Merchant Center (now the Yahoo!|Bing Network)
Improvement in audio quality for online delivery
The reality that radio broadcasters, too, must pay high royalty rates to broadcast online
Requests by agencies for real electronic invoicing and confirmation of schedules
Inadequate station web sites that continue to scream "It's all about us!"
A failed HD Radio push, which will have to be admitted after this year's
holiday sales are analyzed

...oh, I could go on. But my arms are getting tired from shaking your shoulders. So, take a break to hear these final words.

Like the auto industry executives who flew in private jets to a House meeting on how bad their balance sheets were, radio industry executives continue to line their pockets with cash while calling these times bad enough that they have to cut people loose. Everyone sees through the fallacy.

People still have ears. They will always enjoy listening to music, information, and programs that connect with them - those audio experiences that radio once, alone, could produce. But radio growth won't occur with current leaders leading the industry nowhere, trying tired stunts like RAB's Jeff Haley's "Imagine a day without RAB."

Want a resurgence? Get radio to do something of substance that connects to the individual. That's where the internet is winning.

Recapturing the audience's attention is going to require work from people who understand how to meld the old-time radio industry into new media consumption habits. Radio has very few of these persons within its ranks today. (You cannot effectively step from 12 years of programming radio into a VP of Digital Media slot [- especially in NYC]. Spending all that time programming means you would not have had time to garner the new media skill sets required for success.)

Even those people who have the knowledge aren't showing up when it counts. No radio group internet chiefs attended the recent Digital Media Association annual meeting. What's that tell you?

What happened in 2008? Radio took the short road every time it was offered, and many times when it wasn't even present.

If you think radio revenues will start to increase monthly in Spring 2010, because one radio industry CEO says so, think again. [This reminds me of those famous qoutes created by RAB's Gary Fries in 2005-2006.]

It's hard to imagine a recovery for the local radio industry when the same executives are steering their ships into increasingly heavier winds. These folks are already way over their heads in understanding the power of the program, and they are not even close to capturing the concepts needed to build audience online.

To win back the people and revenue, radio industry executives need to comprehend far more than they have in their heads today.

We started by calling this a rant. Let's end by calling for some reason. 2009 is going to be a very tough year. [And 2013 is not going to be much better.]

Quotes from Ken. Years, 2007-2008:
Metrics are the driving force behind online advertising's growth.
In a few short years radio sales teams will also need to talk performance...
Radio groups should immediately hire a local internet advertising guru
in each market. Sales would then be able to assist clients with the
dollars they are placing online, and take a percentage of that spend
as a new revenue stream.
Imagine being able to help local businesses with web sites
tap into the world's English-speaking markets.
Radio is selling yesterday's concepts in an advertising world
of promising tomorrows.
...companies that have been dragging their feet will join the likes
of WalMart, Enterprise Car Rental, Netflix, Procter and Gamble,
and thousands of other companies large and small which demand
hard numbers to back up advertising claims of effectiveness.
Audio has been, and always will be, what radio is about. But it's time
to reject the concept of audio being all that radio will ever be.

Have a safe and merry holiday.

Ken Dardis

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